LabStyle Innovations Announces 2015 First Quarter Results

Successful User Performance Study results move LabStyle towards anticipated FDA clearance; Company launches first HMO patient management platform and e-Commerce website

May 15, 2015, 09:05 ET from LabStyle Innovations Corp.

CAESAREA, Israel, May 15, 2015 /PRNewswire/ -- LabStyle Innovations Corp. (OTCQB: DRIO), developer of the Dario™ Diabetes Management Solution, reported its financial and operational results for the three-month period ended March 31, 2015 and provided an update on recent corporate achievements.

Dario™, is a cloud-based, diabetes management solution which includes novel software applications combined with the patented, 'all-in one', pocket-sized Dario™ Smart Meter that interfaces with a user's mobile device.

LabStyle's major 2015 first quarter highlights include:

  • Shipments to distribution partners and customers of products and software services during the first quarter of 2015 amounted to $141,000.
  • LabStyle has launched and implemented its first HMO patient management platform in partnership with Maccabi Healthcare, one of Israel's leading HMO providers. Through the Dario™ platform, for the first time, patients with diabetes are receiving advanced multi-disciplinary support and remote care for their diabetes 24/7.
  • U.S. FDA clearance for Dario™ expected in 2015 following the submission of new clinical data to FDA for 510(k) in March 2015 based on LabStyle's recently announced positive 368 patients User Performance Study in the United States.
  • LabStyle launched its first e-Commerce website focusing on the Israeli market which offers a platform for people with diabetes to directly purchase the Dario™ Smart Meter and receive the support, knowledge and tools to manage their diabetes personally using their mobile devices. Based on the success of this website, LabStyle plans to open additional e-Commerce websites to serve other geographic markets.
  • The American Diabetes Association (ADA) has recognized LabStyle by selecting the company to present a poster presentation at the upcoming ADA 75th Anniversary Scientific Sessions.

Erez Raphael, LabStyle's President and Chief Executive Officer, stated "We believe that proof of our commercial potential has been demonstrated as we are now selling Dario™ in targeted countries and expanding into new countries in a focused and planned manner.  We are currently focusing on building our business strategy towards the United States and we are concentrating on building potential revenue streams through strategic partnerships and new product offerings that improve patient clinical performance and serve as the tools to possibly improve patient behavior in order to truly give them a better way of life."  

Summary of Financial Results

LabStyle's billings for the first quarter of 2015 amounted to approximately $141,000 compared to approximately $61,000 in the previous quarter and approximately $4,000 in the first quarter of 2014. This includes product shipments to distributors and direct customers as well as services provided in respect to LabStyle's patient management software platform launch as part of the partnership with Maccabi Healthcare.

LabStyle's revenues for the first quarter of 2015 amounted to approximately $67,000 compared to approximately $51,000 in the previous quarter and none in the first quarter of 2014.

Deferred revenues for the first quarter of 2015 amounted to approximately $56,000 compared to approximately $24,000 in the previous quarter.

Non-GAAP adjusted EBITDA, as detailed in the table below decreased by approximately $388,000 to approximately $1,573,000 for the first quarter of 2015, compared to approximately $1,961,000 Non-GAAP adjusted EBITDA for the first quarter of 2014.

GAAP net loss decreased by approximately $1,346,000 to approximately $1,638,000 for the first quarter of 2015, compared to approximately $2,984,000 net loss for the first quarter of 2014.

As of March 31, 2015, LabStyle had cash and cash equivalents of approximately $1,855,000.  During February and March, 2015, LabStyle raised approximately $1.9 million in net proceeds from a private placement. 

Note on Non-GAAP Measures

Readers should note that LabStyle has, in certain disclosures above and in the schedule below, supplemented its GAAP net income (loss) with a non-GAAP measure of adjusted EBITDA.  Management believes that this non-GAAP financial measure provides useful supplemental information to management and investors regarding LabStyle's performance, facilitates a more meaningful comparison of results for current periods with previous operating results, and assists management in analyzing future trends, making strategic and business decisions and establishing internal budgets and forecasts. A reconciliation of non-GAAP adjusted EBITDA to GAAP net income (loss) in the most directly comparable GAAP measure is provided in the schedule below.

There are limitations in using this non-GAAP financial measure because it is not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. This non-GAAP financial measure should not be considered in isolation or as a substitute for GAAP financial measures. Investors and potential investors should consider non-GAAP financial measures only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP and the reconciliations of the non-GAAP financial measure provided in the schedule below:

Unaudited




Three months ended

March 31,

US Dollars in thousands except stock and stock data




2015


2014





Unaudited








Net income (loss) as reported




$         (1,638)


$       (2,984)








Adjustments:







Depreciation




79


198

Revaluation of warrants




(150)


(142)

Issuance cost related to warrants to investors and 
     service provider




-


448

Other finance expenses




11


10








EBITDA




(1,698)


(2,470)








Stock-based compensation




125


509








Non-GAAP adjusted EBITDA 




$            (1,573)


$          (1,961)








Basic and diluted Non-GAAP adjusted EBITDA per
     share




$             (0.07)


$           (0.46)

Weighted average number of common stock used in
     computing Non-GAAP adjusted EBITDA per
     share




21,157,052


4,254,971

About LabStyle Innovations

LabStyle Innovations Corp. (OTCQB:DRIO) develops and commercializes patented technology providing consumers with laboratory-testing capabilities using smart mobile devices. LabStyle's flagship product is the Dario™ Diabetes Management Solution. Dario™ empowers people with diabetes to take charge of their health with the right tools, insights, and support in their pocket.  With access to both real-time and historical blood glucose data, Dario™ is designed to spot patterns, recommend the right treatments and support behavior change efforts.

Dario™ is a platform that combines an all-in-one, blood glucose meter, smart phone application (iOS & Android), website application and treatment tools to support more proactive and better informed decisions by patients, doctors and healthcare systems. The stylish and compact self-monitoring system combines a lancet to obtain a blood sample, a proprietary disposable test strip cartridge and a smartphone-driven glucose meter. LabStyle Innovations is led by an experienced management team with vast software, medical device and technology experience and guided by a world class board of directors and scientific advisory board. For more information: www.myDario.com and http://myDario.investorroom.com.

Cautionary Note Regarding Forward-Looking Statements

This news release and the statements of representatives and partners of LabStyle Innovations Corp. (the "Company") related thereto contains or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not statements of historical fact may be deemed to be forward-looking statements. For example, when the Company says that it expects FDA clearance for Dario in 2015, when it presents its billings for the quarter which may not necessarily be fully recognized as revenues in a timely manner, and when it says that it is focusing on building its business strategy towards the United States and is concentrating on building potential revenue streams through strategic partnerships and new product offerings, it is using forward-looking statements. Without limiting the generality of the foregoing, words such as "plan," "project," "potential," "seek," "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate" or "continue" are intended to identify forward-looking statements. Readers are cautioned that certain important factors may affect the Company's actual results and could cause such results to differ materially from any forward-looking statements that may be made in this news release. Factors that may affect the Company's results include, but are not limited to, regulatory approvals, product demand, market acceptance, impact of competitive products and prices, product development, commercialization or technological difficulties, the success or failure of negotiations and trade, legal, social and economic risks, and the risks associated with the adequacy of existing cash resources. Additional factors that could cause or contribute to differences between the Company's actual results and forward-looking statements include, but are not limited to, those risks discussed in the Company's filings with the U.S. Securities and Exchange Commission. Readers are cautioned that actual results (including, without limitation, the timing for and results of the Company's commercial and regulatory plans for Dario™ as described herein) may differ significantly from those set forth in the forward-looking statements. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands






March 31,


December 31,





2015


2014





Unaudited










ASSETS














CURRENT ASSETS:







Cash and cash equivalents




$ 1,855


$ 1,453

Restricted cash




13


-

Short-term bank deposits




68


83

Trade receivables




22


-

Inventories




231


234

Accounts receivable and prepaid expenses




260


286








Total current assets




2,449


2,056








LEASE DEPOSIT




40


47








PROPERTY AND EQUIPMENT, NET




935


978








Total assets




$ 3,424


$ 3,081








  

  

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands (except stock and stock data)






March 31,


December 31,





2015


2014





Unaudited










LIABILITIES AND STOCKHOLDERS' DEFICIENCY














CURRENT LIABILITIES:







Trade payables




$            844


$            708

Deferred revenues




56


24

Other accounts payable and accrued expenses




766


884








Total current liabilities




1,666


1,616








LIABILITY RELATED TO WARRANTS




3,853


4,003















COMMITMENTS AND CONTINGENT LIABILITIES














CONVERTIBLE PREFERRED SHARES:







Series A Preferred Stock of $0.0001 par value -
A
uthorized: 60,000 shares at March 31, 2015 (unaudited) and December 31, 2014; Issued and Outstanding: 40,100 shares and 41,652 at March 31, 2015 (unaudited) and December 31, 2014, respectively; Aggregate liquidation preference of $4,010 and $4,165 at March 31, 2015 (unaudited) and December 31, 2014, respectively




 

 

 

2,655


 

 

 

2,757








STOCKHOLDERS' DEFICIENCY







Common Stock of $0.0001 par value -
Authorized: 80,000,000 shares at March 31, 2015 (unaudited) and December 31, 2014; Issued and Outstanding: 27,917,266 and 16,233,430 at March 31, 2015 (unaudited) and December 31, 2014, respectively




3


2

Preferred Stock of $0.0001 par value -
Authorized: 4,940,000 shares at March 31, 2015 (unaudited) and December 31, 2014; Issued and Outstanding: None at March 31, 2015 (unaudited) and December 31, 2014




-


-

Additional paid-in capital




32,943


30,761

Accumulated deficit




(37,696)


(36,058)








Total stockholders' deficiency




(4,750)


(5,295)








Total liabilities and stockholders' deficiency




$         3,424


$          3,081

 

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

U.S. dollars in thousands (except stock and stock data)






Three months ended

March 31,





2015


2014





Unaudited








Revenues




$                67


$                -

Cost of revenues




297


421








Gross loss




230


421








Operating expenses:







Research and development




$              883


$            1,107

Sales and marketing




252


286

General and administrative




412


854








Total operating expenses




1,547


2,247








Operating loss




1,777


2,668








Financial expenses (income), net:







Revaluation of fair value of warrants




(150)


(142)

Other financial expenses, net




11


458








Total financial expenses (income), net




(139)


316








Net loss




$           1,638


$            2,984








Net loss per share














Basic and diluted loss per share




$         (0.08)


$          (0.70)

Weighted average number of common stock 
     used in computing basic and diluted net loss 
     per share




21,157,052


4,254,971

 

  

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands




Three months ended

March 31,



2015


2014



Unaudited






Cash flows from operating activities:





Net loss


$        (1,638)


$        (2,984)

Adjustments required to reconcile net loss to net cash used in operating activities:





Stock-based compensation


125


509

Issuance cost related to warrants to investors and service provider


-


448

Depreciation


79


198

Increase is trade receivables


(22)


-

Decrease (increase) in accounts receivables and prepaid expenses


22


(73)

Increase (decrease) in trade payables


145


(51)

Increase in deferred revenues


32


-

Decrease in other accounts payable and accrued expenses


(118)


(242)

Change in the fair value of warrants


(150)


(142)






Net cash used in operating activities


(1,525)


(2,337)






Cash flows from investing activities:





Proceeds of maturities of short-term bank deposit


(13)


-

Investment in restricted cash


13


-

Investment in lease deposit, net


7


-

Purchase of property and equipment


(36)


(116)






Net cash provided by (used in) investing activities


(29)


(116)






Cash flows from financing activities:





Proceeds from issuance of Common Stock and warrants, net of issuance cost


1,956


3,813

Proceeds from exercise of options and warrants


*) -


189






Net cash provided by financing activities


1,956


4,002






Increase in cash and cash equivalents


402


1,549

Cash and cash equivalents at the beginning of the period


1,453


2,263






Cash and cash equivalents at the end of the period


$          1,855


$          3,812






Non-cash investing and financing and activities:










Receivable on account of shares


$                 -


$               67

Conversion of liability related to warrants into Common Stock


$                 -


$                 9

Purchase of property and equipment


$               29


$                 4

Conversion of Series A Preferred Stock into Common Stock


$             102


$                 -


*) represents an amount lower than $1.

 

Contacts:
Press

Brenda Zeitlin
LabStyle Innovations
1 800 896 9062
Brenda@mydario.com

SOURCE LabStyle Innovations Corp.